International Fraud & Asset Tracing 2026 Comparisons

In Cyprus, there is no single, standalone cause of action for civil or commercial fraud. Instead, the legal framework has evolved in a flexible and pragmatic way, allowing courts to address fraudulent conduct through a combination of statutory provisions and common law principles.

At its core, fraud in Cyprus involves dishonest conduct that results in loss. Claims most commonly arise through actions for fraudulent misrepresentation, unlawful means conspiracy and breach of fiduciary duties. In practice, such claims are frequently supported by robust interim measures aimed at preserving assets and securing evidence pending the final resolution of the dispute.

Fraudulent Misrepresentation (Deceit)

Under Section 36 of the Civil Wrongs Law, Chapter 148, a claimant must establish that the defendant made a false representation of fact, knowing it was false, without believing it to be true or recklessly disregarding its truth. The representation must have been made with the intention that the claimant would rely on it. The claimant must then show that they were in fact misled, acted in reliance on the misrepresentation and suffered damage as a result.

Section 17 of the Contracts Law, Chapter 149 also recognises misrepresentation in the context of contract formation. Under said provision, the term “fraud” encompasses a range of deceptive conduct committed by a party to a contract (with their knowledge or through their agent) with the intention of deceiving the other party or inducing them to enter into the agreement. This includes making false statements of fact without belief in their truth, actively concealing material facts, making promises without any intention of fulfilling them, engaging in any conduct designed to deceive or committing any act or omission that the law expressly classifies as fraudulent.

A contract induced by fraud is voidable at the option of the innocent party. The primary remedy is rescission, which sets aside the contract and restores the parties to their pre-contractual position.

Unlawful means conspiracy

Unlawful means conspiracy is recognised in Cyprus as a distinct tort under common law. It arises where two or more people take action that is unlawful in itself, with the intention of causing damage to a third party who incurs the intended damage. It is not necessary to prove that damage was the main or predominant purpose of the conspirators. It is sufficient that harm to the claimant formed part of their intention. To establish a claim, the claimant must prove:

• a combination or co-ordinated action between two or more persons;
• the use of unlawful means;
• knowledge of the unlawfulness of those means;
• an intention to injure the claimant;
• an overt act carried out in furtherance of the agreement; and
• damage.

The agreement itself does not need to be formal or expressly stated. What is required is a shared understanding or deliberate co-ordination directed towards a common objective. Furthermore, the notion of “unlawful means” is interpreted broadly and is not confined to criminal conduct. It may include civil wrongs, such as inducing a breach of contract or committing another tort.

Breach of Fiduciary Duties

A claim for breach of fiduciary duty is available in Cyprus where a person in a position of trust and confidence fails to act in the best interests of the person to whom they owe such duties. Recognised categories of fiduciary relationships include those between trustee and beneficiary, agent and principal, director and company, solicitor and client, and partners. However, the categories are not closed, and fiduciary duties may arise in other commercial relationships, such as joint ventures, where the requisite attributes are present.

The core obligation of a fiduciary is one of loyalty. Fiduciaries must act solely in the interests of the person to whom they owe duties and must subordinate any personal interests they have. To establish a claim for breach of fiduciary duty, the claimant must prove:

• the existence of a fiduciary relationship;
• breach of the fiduciary duties owed within that relationship; and
• loss or damage suffered as a result of the breach (for claims seeking compensation) or profit made by the fiduciary (for claims seeking an account of profits).

Several remedies are available for breach of fiduciary duty including equitable compensation, an account of profits gained from the fiduciary’s wrongdoing and proprietary remedies such as tracing any benefit received. In addition, the fiduciary may be liable to disciplinary proceedings from an appropriate regulator or may be disqualified.

The Republic of Cyprus has ratified the Council of Europe Criminal Law Convention on Corruption (Law 23(III)/2000, as amended by Law 22(III)/2012) and has implemented EU Council Framework Decision 2003/568/JHA on combating corruption in the private sector. Under Article 4 of the ratifying legislation, active bribery and passive bribery in the private sector constitute punishable criminal offences. The courts have recognised that bribery poses a serious threat to lawful society, distorts market competition and impedes healthy economic development.

Available Causes of Action

Where a principal discovers that their agent has received a bribe from a third party, several causes of action may be available under Cypriot law, including the following.

• Fraud/deceit (Article 36 Civil Wrongs Law, Chapter 149): A claimant may bring an action in fraud where the bribe was procured through false representations of fact made intentionally and with full knowledge that they were untrue, resulting in loss to the claimant.
• Misrepresentation: Claims may be brought for damages arising from false or negligent misrepresentations that induced the claimant to enter into a transaction or make payments in circumstances connected with the bribery scheme.
• Conspiracy to defraud: Where multiple parties co-operate in a scheme to defraud the claimant through bribery, an action for conspiracy may lie. This was recognised in the Supreme Court decision in Civil Appeals No 14/2014 and 89/2014, where the Court examined allegations that multiple defendants participated in a co-ordinated fraudulent scheme.
• Unjust enrichment: A claim for the recovery of sums paid without legal basis may be pursued where the claimant can demonstrate that the recipient has been enriched at their expense without justification.
• Breach of fiduciary duty: An agent who accepts a bribe breaches their fiduciary obligations to their principal. The principal may seek remedies including disgorgement of the bribe, account of profits and damages for any losses suffered as a result of the breach.

A potentially decisive limitation on the availability of these causes of action arises from the common law doctrine of ex turpi causa non oritur actio – no action arises from a disgraceful cause. This principle was applied by the majority of the Supreme Court in Civil Appeals No 14/2014 and 89/2014. Where the claimant has participated knowingly in an illegal bribery scheme, the courts will likely apply the ex turpi causa doctrine to deny all relief, even where the claimant has suffered genuine loss through the dishonest conduct of others. Innocent claimants who were unaware of their agent’s receipt of bribes retain full access to all available civil remedies.

Remedies Available

Cyprus law provides both personal and proprietary remedies to a principal whose agent has received a bribe. The agent is liable to account to the principal, as a constructive trustee, for all monies and benefits received in breach of fiduciary duties. The principal may also claim compensatory damages for any loss caused by the breach. Moreover, in terms of proprietary remedies, a fiduciary who obtains a benefit in breach of duty may be treated as holding that benefit on constructive trust for the principal. The constructive trust may arise automatically when the bribe is received, making the principal the beneficial owner with rights to trace and recover such benefits. The principal may also seek a declaration that the defendant holds the asset on constructive trust and an order for its transfer. If the bribe has been used to acquire other property, the principal may trace into that property and claim it.

The principal may seek perpetual injunctions to restrain the agent from dissipating the bribe or assets acquired with it.

Claims against third parties who assist or facilitate the fraudulent acts of another in Cyprus are primarily based on common law and equitable principles, closely aligned with English law.

One of the main causes of action is dishonest assistance. This arises where a third party assists in a breach of trust or fiduciary duty in a dishonest manner. To succeed, the claimant must show the existence of a fiduciary relationship, a breach of that duty and that the defendant assisted in the breach while acting dishonestly. A person will be considered dishonest if, based on what they actually knew at the time, their conduct would be regarded as dishonest by ordinary standards.

It is not necessary to prove that the defendant knew all the details of the fraud. It is sufficient that they were aware that something improper was taking place. This includes situations where the defendant deliberately ignored obvious signs of wrongdoing or chose not to make enquiries, a behaviour commonly referred to as blind-eye knowledge.

Another key claim is knowing receipt, which arises where a third party knowingly receives assets or proceeds that have been misappropriated in breach of trust or fiduciary duty.

Liability may also be established through conspiracy. This encompasses both unlawful means conspiracy – which involves the use of unlawful acts as analysed previously – and lawful means conspiracy, a more exceptional basis for liability that requires a higher threshold to be met. Under lawful means conspiracy, liability may arise even where the constituent acts are themselves lawful, provided that two or more persons combine with the predominant purpose of causing harm to the claimant. Crucially, the intention to injure must constitute the main or dominant purpose of the agreement, rather than being merely an incidental consequence.

While lawful means conspiracy is less commonly invoked than its unlawful counterpart, it remains potentially relevant in fraud cases where the evidence demonstrates a co-ordinated course of conduct directed primarily at injuring the claimant.

The limitation period for bringing a fraud claim in Cyprus is generally six years. However, where the claim involves fraud or where there is deliberate concealment of any fact related to the cause of action, time begins to run only from the date on which the claimant discovered the fraud or could reasonably have discovered it through the exercise of due diligence.

It should also be noted that a stricter limitation period applies in the context of international trusts. In particular, any action brought against a trustee of an international trust on the basis that the trust was established with intent to defraud creditors must be initiated within two years from the date of the transfer of the assets into the trust.

Proprietary remedies are available in Cyprus where a fiduciary has acted in breach of their obligations, entitling the claimant to a declaration that the defendant holds the asset on constructive trust for their benefit, and for an order requesting the defendant to transfer the asset to the claimant.

The Cyprus legal system recognises these equitable principles as part of its common law tradition. A constructive trust is an ever-expanding concept, designed to keep the hands of the court free, to meet the demands of justice and good conscience. Cyprus courts have clarified the distinction between resulting and constructive trusts. In Christoforou v Christoforou (1998) 1 A.A.D. 1551, the court explained that both are created by operation of law, but resulting trusts arise primarily on the basis of intention presumed from the circumstances of each case, whereas constructive trusts are imposed in view of the state of affairs that has developed, independent of express or implied intention.

Where a constructive trust is alleged, the claimant must prove not only the existence of the trust but also their standing to pursue the proprietary claim. This reinforces that proprietary remedies through tracing require both a proper equitable foundation and clear demonstration of the claimant’s entitlement to pursue the specific assets.

When a claimant can establish a proprietary interest through a constructive trust or other equitable remedy, the claimed property is treated as never having belonged to the defendant’s estate. This means the claimant can recover the specific property (or its traceable proceeds) ahead of unsecured creditors, as the asset is held on trust for the claimant’s benefit rather than forming part of the insolvent’s general assets available for distribution to creditors.

As Cyprus is a common law jurisdiction, and in instances where Cypriot case law is silent on an issue, guidance is typically sought from English case law and common law principles. This means Cyprus courts would likely apply established English tracing rules in relation to mixed funds, including:

• the ability to trace fraud proceeds that have been converted or exchanged for other assets;
• principles governing tracing into mixed bank accounts; and
• rules distinguishing between mixing with the wrongdoer’s own funds versus mixing with funds of innocent third parties.

Where fraud proceeds have been successfully invested and have generated profits, a Cyprus court has the flexibility to:

• impose a constructive trust over the enhanced asset (including gains);
• order an accounting for profits; and
• award an equitable lien over specific property as security.

Cyprus provides robust procedural tools to support asset recovery, including:

• freezing orders (often issued when there is a real risk of alienation or dissipation of assets, both movable and/or immovable, situated in Cyprus or abroad);
• disclosure orders requiring respondents to reveal asset details;
• search orders to preserve evidence; and
• appointment of receivers where necessary.

The new Civil Procedure Rules (in force since 2023) introduced mandatory pre-action protocols requiring parties to comply with certain steps before commencing proceedings.

Although there is no specific pre-action protocol tailored to fraud claims, prospective claimants are still generally required to send a letter before action. This letter should set out in detail the factual and legal basis of the claim, identify the relief sought and provide the prospective defendant with a reasonable opportunity to respond. In turn, the defendant is expected to engage meaningfully with the claim, whether by admitting, denying or seeking further clarifications.

The court retains wide case management and costs powers to address non-compliance, including the ability to impose sanctions on a party who fails to adhere to these pre–action steps.

However, in the context of fraud claims, strict compliance may not always be appropriate. Where there is urgency or a real risk of asset dissipation, a claimant may be justified in proceeding without prior notice and seeking ex parte interim relief, such as freezing orders or disclosure orders. In such circumstances, a departure from pre-action requirements will generally be accepted where giving notice would risk undermining the effectiveness of the relief sought.

In practice, such claims often begin with a without notice application before, or at the same time as, issuing the claim form. CPR Part 25 expressly allows the court to grant interim relief before proceedings are commenced where the matter is urgent, or it is otherwise desirable in the interests of justice. In such cases, the grant of relief is typically conditional upon the claimant undertaking to issue proceedings if they have not already done so.

A party may apply for an interim injunction to prevent a defendant from disposing of or otherwise dealing with their assets to ensure that the defendant does not hide, transfer or dissipate assets in a manner that would render them effectively judgment-proof.

A range of interim measures is available, depending on the circumstances of the case. The CPR have, to some extent, codified the court’s power to grant several types of orders in CPR Part 25. These include:

• freezing orders (including worldwide freezing orders), which are commonly granted where there is a real risk of dissipation of assets, whether movable or immovable, located in Cyprus or abroad;
• disclosure orders, often granted ancillary to freezing orders, requiring the respondent to disclose details of their assets;
• appointment of a receiver, where the court considers it necessary to manage, preserve or realise assets; and
• an order for the detention, custody or preservation of relevant property.

Interim measures may apply to both tangible and intangible assets, wherever located, and extend to assets held directly or indirectly, including those beneficially owned.

Freezing orders operate in personam, intending to bind the individual rather than the asset itself, and may have worldwide effect. They typically include exceptions, such as for reasonable living expenses, legal costs and ordinary business activities.

Pursuant to Article 32 of the Courts Law 14/60, interim relief will be granted where:

• there is a serious question to be tried;
• there appears to be a probability that the plaintiff is entitled to relief; and
• unless the interim order is issued, it would be difficult or impossible to ensure complete justice at a later stage.

The claimant must further demonstrate that there is a real risk of dissipation of assets, such that any judgment obtained may go unsatisfied. This does not require proof that dissipation is likely, but rather that there is a genuine risk supported by objective evidence, and not merely by speculation.

The court will also consider whether the grant of such relief would be just and convenient under the circumstances of each case. 

Where an application is made without notice, the applicant is subject to a duty of full and frank disclosure, requiring them to present all material facts, including those adverse to their case.

Furthermore, a cross-undertaking in damages is generally required. The applicant must undertake to compensate the respondent for any loss suffered if it is later determined that the order was wrongly granted, subject to the court’s discretion in the circumstances. Such undertakings may be secured through a bank guarantee or payment into court.

Sanctions for non-compliance are also significant. All interim orders contain a penal notice warning that breach may result in contempt of court. If the court finds such contempt, it may order the payment of a fine, confiscation of assets or potentially imprisonment. In addition, any third party served with an order must not assist in its breach or deliberately frustrate its purpose, as they may also be held in contempt.

Ancillary disclosure orders are commonly granted in support of freezing orders to ensure their practical effectiveness. These require the respondent to disclose details of their assets and are usually defined broadly to extend beyond assets held in the respondent’s own name, so as to include assets beneficially owned or otherwise directly or indirectly controlled by the respondent. Accordingly, assets held through nominees, trustees or corporate structures fall within the ambit of disclosure.

The procedural requirements for obtaining such orders align with those applicable to freezing injunctions mentioned in 1.7 Prevention of Defendants Dissipating or Secreting Assets. The same principles regarding sanctions for non-compliance and the requirement for a cross-undertaking in damages also apply.

An applicant may seek a search order where there is a real risk that evidence may be destroyed, concealed or tampered with. Such an order allows the applicant’s representatives, under the supervision of an independent lawyer appointed by the court, to enter specified premises and search for, inspect and secure relevant materials, including documents, computers and electronic data. The scope of a search order is typically narrowly defined, and only items expressly specified therein may be taken by the applicant’s representatives.

To obtain such relief, the applicant must meet a particularly high threshold. In addition to satisfying the general requirements for interim relief under Article 32 of the Courts Law 14/60 (see 1.7 Prevention of Defendants Dissipating or Secreting Assets) the applicant must also demonstrate a strong prima facie case that:

• the potential damage, threatened or actual, is very serious;
• there is clear evidence that the defendant holds relevant incriminating material; and
• there is a real risk that such material may be destroyed or concealed if notice is given.

The court must also be satisfied, on the basis of clear and compelling evidence, that the interests of justice require the order to be granted without prior notice. A cross-undertaking in damages will also be required as a matter of course.

Disclosure from third parties is available both after and before proceedings are commenced.

Pursuant to CPR Rule 31.6, a wronged party may apply for specific disclosure against a non-party after proceedings have commenced. The application must be supported by evidence satisfying the requirements set out in CPR Rule 31.5(2), including a sufficiently detailed description of the documents or categories sought, an explanation of their relevance and materiality to the issues in dispute and reasons for believing that the documents are within the possession, custody or control of the third party.

The court will grant such an order only if the previously delineated requirements are met, and none of the objections listed in CPR Rule 31.5(7) apply, including lack of relevance to the matters in dispute, privilege, confidentiality concerns that the court considers compelling, particular difficulty or burden in producing the requested evidence and situations where the document has been lost or destroyed.

In addition, pre-action disclosure is available under CPR Rule 31.7, allowing a prospective claimant to obtain documents before proceedings are commenced. This may be particularly relevant in tracing claims. The application must be supported by evidence identifying the documents sought with sufficient specificity, explaining their relevance in the anticipated proceedings and confirming that these are not already within the applicant’s possession or that it would be unduly burdensome for them to disclose them otherwise. The court may grant such an order only where both the applicant and the respondent are likely to be parties to subsequent proceedings, the evidential requirements described previously are satisfied and there is no valid objection under CPR Rule 31.5(7).

Pre-action disclosure is further recognised as an interim remedy under CPR Rule 25(1)(j) and may be sought by an application under Part 23 where substantive proceedings have not been commenced.

The court further retains jurisdiction to order disclosure against third parties such as Norwich Pharmacal orders, where a third party has become involved, even innocently, in wrongdoing and holds information necessary to identify the wrongdoer or trace assets. It should be noted that any material obtained pursuant to such an order may be used only for the purposes of the specific proceedings, or in accordance with the terms of the court’s order, and cannot be used for any collateral or ulterior purpose without the court’s permission.

The court may also grant injunctions against third parties in aid of enforcement or execution of a judgment. This might include an injunction granted directly against a third party with an ancillary disclosure order.

It is possible to seek interim injunctions such as those described in the previous sections, on a without notice (ex parte) basis in appropriate circumstances or when seeking urgent interim relief. CPR Rule 23.6 provides that an application may be made without serving an application notice:

• in cases of urgency or other exceptional circumstances;
• by consent of all parties;
• with the permission of the court;
• where the overriding objective is best furthered by doing so; and
• where this is permitted by law, rule or a court order.

In practice, without notice applications are most commonly sought where there is a real risk that if the defendant is notified in advance, they may take steps to frustrate the administration of justice, for example by dissipating assets, concealing information or otherwise interfering with evidence.

An application without notice must be supported by evidence explaining the reasons why the relief sought should be granted and the reasons why notice was not given. The applicant is subject to a strict duty of full and frank disclosure, requiring disclosure of all material facts, including those adverse to their case and those that would have been discovered through reasonable enquiries.

A cross-undertaking in damages is also required to compensate the respondent if it is subsequently determined that the applicant was not entitled to the relief granted by the court.

If the court considers that the application should not have been made without notice, it may either dismiss the application or adjourn it so that proper notice can be given to the other party.

Alternatively, where the requested order is granted, this would usually be for a limited period. A return date has to be set for an inter partes hearing, at which the respondent may challenge the order, and the court will decide whether to continue, vary or discharge it.

In Cyprus, fraud victims can pursue both criminal prosecution and civil claims simultaneously. The legal system generally permits criminal and civil proceedings to run in parallel, though courts retain discretion to intervene where they identify abuse of process, such as using parallel proceedings to oppress the opponent or gain improper tactical advantage. The criminal route is primarily state-driven, with investigative agencies like MOKAS (the financial intelligence unit) identifying assets, while civil proceedings place the burden of asset identification and tracing on the claimant themselves through disclosure orders, expert services and investigation of public records. A key advantage of the civil route is the lower burden of proof required, with claimants needing to establish their case only on the balance of probabilities rather than the criminal standard.

In practice, initiating criminal proceedings does not automatically delay civil claims. Evidence obtained during criminal investigations can generally be used in civil proceedings, subject to standard admissibility rules and constitutional requirements. However, strategic considerations arise: victims may choose to wait for criminal investigations to progress before advancing civil claims to benefit from state-gathered evidence, or courts may exercise discretion to stay civil proceedings if they appear motivated by improper tactical considerations. Civil claimants also have access to remedies including damages, restitutionary awards and freezing orders to prevent asset dissipation. The system therefore provides flexibility for fraud victims to pursue both routes, provided they do so in good faith.

A claimant may obtain a default judgment where the defendant fails to take the required procedural steps, such as failing to file a notice of appearance or a defence within the prescribed time limits.

In addition, a summary judgment is generally available in civil proceedings where the defendant has no real prospect of successfully defending the claim, and there is no other compelling reason for the case to proceed to trial. However, in practice, a summary judgment would rarely be granted in fraud cases, as such claims typically involve complex factual issues and issues of credibility that require cross-examination of witnesses and, often, evidence from experts.

CPR Rule 16.13 provides that a party relying on allegations of fraud is required to expressly and specifically set out such allegations in their pleadings. This includes identifying the precise acts said to constitute fraud, providing full particulars of any misrepresentations and detailing any alleged breaches of fiduciary duty, notification or knowledge of relevant facts.

There is no express provision in the CPR in Cyprus permitting claims to be issued against persons unknown.

Cyprus courts have not yet directly addressed the specific issue of claims against unknown fraudsters, but given Cyprus’s established practice of following English common law principles – particularly in the area of injunctive relief and fraud litigation – it is possible that such claims would be permitted when the issue arises. The anticipated approach would require that unknown defendants be described with sufficient certainty to clearly identify who falls within and outside the scope of the claim, and that these persons, while currently unidentified, must be capable of being identified and served with proceedings.

The overarching principle is that courts may adopt innovative procedural tools to combat fraud and prevent injustice, balancing the need to provide victims with effective remedies against the requirement that defendants receive fair notice of claims against them. This framework aligns with developments across common law jurisdictions where “persons unknown” injunctions and freezing orders have become established mechanisms for addressing modern fraud, particularly in cases involving cryptocurrency, online fraud or other sophisticated schemes where perpetrators intentionally obscure their identities.

The court may compel a witness to give evidence and produce documents by issuing a witness summons. Once the summons has been properly served, the witness is under a legal obligation to comply and any failure to do so without lawful excuse may be treated as contempt of court.

A company may be held responsible on the basis of vicarious liability for the acts or omissions of its employees or agents acting within the scope of their authority. In such cases, the conduct of the employee is treated as the conduct of the company.

In fraud cases, where establishing liability in many causes of action depends on proving a particular state of mind, the courts will apply the identification (or “directing mind and will”) doctrine. The court essentially examines the acts and state of mind of those individuals who represent the company’s directing mind, typically directors, senior officers or others exercising real decision-making authority and control over the company’s affairs. Where such individuals act within the scope of their authority and engage in fraudulent conduct, their knowledge and intent are attributed to the company itself, thereby rendering it liable.

In exceptional circumstances, Cypriot courts may depart from the fundamental principle of separate legal personality of a company and pierce the corporate veil, so as to identify the company’s rights, liabilities and assets as those of its shareholders or controllers.

The doctrine is particularly relevant in fraud cases, where individuals may seek to conceal their fraudulent acts or the proceeds of fraud behind corporate structures in an attempt to avoid personal liability or render themselves judgment-proof.

Directors usually owe their fiduciary duties to the company. Therefore, the general rule is that the company itself is the proper claimant in respect of wrongs done to it. In practice, this means that any action against a fraudulent director would ordinarily be brought by the company acting through its board.

However, there are exceptions that allow shareholders to bring claims on behalf of the company. This is mainly through a derivative action, which enables a shareholder (typically a minority shareholder) to bring proceedings in the name of the company against directors or controlling shareholders who have engaged in wrongdoing, such as fraud, breach of fiduciary duty or misappropriation of assets. This is particularly significant where the alleged wrongdoers are themselves in control of the company and would prevent the company from pursuing the claim.

Under CPR Rule 20.13, a derivative action cannot proceed without the court’s permission, although prior permission is not required when seeking urgent interim relief. The court will grant leave only if the claimant establishes a prima facie case, a threshold higher than a merely arguable case. In assessing this, the court will consider whether in the absence of a defence, the claimant would be entitled to judgment. At this stage, where facts are disputed, the claimant’s evidence would generally prevail.

The claim must also fall within one of the exceptions to the rule in Foss v Harbottle, the most significant being where the wrongdoing amounts to fraud or that the directors either committed a deliberate or dishonest breach of duty or obtained an improper benefit, whether financial or otherwise.

A claimant must obtain the court’s leave to serve proceedings out of the jurisdiction, where the defendant is located abroad and in a non-EU country.

Such leave will be granted where one or more of the jurisdictional gateways under CPR Rule 6.8 are satisfied, such as where the claim relates to a civil wrong committed within the jurisdiction, damage has occurred or will occur in Cyprus or where the foreign defendant is considered a necessary or proper party to the proceedings. The application must be supported by an affidavit demonstrating a prima facie good cause of action, identifying the defendant’s residence and explaining why service outside the jurisdiction is justified. The court must also be satisfied that the claim is suitable to be served abroad.

Furthermore, Cyprus courts are willing to exercise extraterritorial jurisdiction where there is a sufficient connecting link to Cyprus. This includes the ability to grant worldwide freezing orders. Nonetheless, these operate in personam and are enforceable only against parties within the court’s jurisdiction, despite that assets may be located abroad.

Please see 4.1 Joining Overseas Parties to Fraud Claims regarding obtaining permission to serve abroad. Once leave is granted, service must generally be effected in accordance with applicable international instruments, such as the Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Service Convention) or any relevant bilateral agreement between Cyprus and the foreign state. These typically involve transmission through designated central authorities.

Where it is not practicable to effect service in accordance with the prescribed international or bilateral procedures, for example due to delay or because the defendant is evading service, the court may permit substituted service through alternative means. The court has broad discretion to allow service by any method it considers appropriate in the circumstances, including service by email or other electronic means, provided it is satisfied that the suggested method is likely to bring the proceedings to the defendant’s attention.

Once a party has obtained a judgment in Cyprus, or a foreign judgment has been recognised and registered, the successful party may proceed with enforcement measures to recover the judgment debt.

Nonetheless, in fraud cases, enforcement can be particularly challenging, especially where the judgment debtor has had the opportunity to conceal or dissipate assets before the wrongdoing is uncovered. In such circumstances, the courts retain the power to grant post-judgment relief, including freezing injunctions, to assist in the enforcement process.

The available enforcement methods include writs of execution for the sale of movable property, as well as writs for the sale of immovable property. In relation to immovable property, a creditor may also secure the debt by registering a charging order over the debtor’s property.

Additional measures include garnishee orders (or third-party debt orders), which allow the creditor to seize funds or assets of the debtor held by third parties, such as bank accounts. The court may also order the judgment debtor to make periodic/monthly payments towards satisfaction of the debt following a cross-examination of the debtor regarding their assets, sources of income and overall expenses.

Furthermore, in appropriate cases, insolvency proceedings such as winding-up, may be initiated against the debtor. While such proceedings do not constitute enforcement methods in the strict sense, as they do not guarantee recovery of the full debt, they may be used as a means of exerting pressure or facilitating recovery where the debtor is a Cypriot company and the debt exceeds the statutory threshold of EUR5,000.

There is no single unified system for the recognition and enforcement of foreign judgments in Cyprus. The applicable framework each time will depend on the country in which the judgment was issued and the legal framework governing that jurisdiction.

Judgments issued by courts of EU member states (with the exception of Denmark) are automatically recognised and enforceable in Cyprus pursuant to Recast Regulation (EU) No 1215/2012.

For judgments originating from the United Kingdom, British dominions, protectorates, mandated territories and other countries that afford reciprocal treatment to Cypriot judgments, recognition and enforcement are governed by the Foreign Judgments (Reciprocal Enforcement) Law of 1935 (Chapter 10), as amended.

In addition, Cyprus has entered into various bilateral treaties with countries such as Russia, Ukraine, Georgia and China, as well as multilateral conventions such as the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “HCCH 2019 Judgments Convention”), which provide specific frameworks for recognition and enforcement. These instruments are generally based on the principle of reciprocity, meaning that recognition in Cyprus may depend on whether the foreign jurisdiction would recognise a corresponding Cypriot judgment.

Where a judgment originates from a country outside the EU and no applicable treaty exists, recognition and enforcement may still be pursued through a common law action. In such cases, the judgment creditor may initiate fresh proceedings before the Cypriot courts, seeking a judgment for the amount due under the foreign judgment, effectively treating it as a debt.

Privilege against self-incrimination may be invoked by a respondent or defendant (and, in criminal proceedings, by an accused person) in respect of both oral and documentary evidence. The principle is grounded in common law principles and reflected in the Constitution, including the right to a fair trial and the right not to incriminate oneself. Accordingly, a defendant may refuse to answer specific questions or produce documents where doing so would expose them to a real risk of criminal liability.

Privilege against self-incrimination also arises in the context of civil proceedings, including fraud claims. For example, a defendant may rely on it where compliance with search orders or disclosure orders would create a real risk of criminal prosecution. The protection extends not only to the production of information or documents but also to obligations requiring entry to premises for inspection or copying of materials where there is a genuine risk of self-incrimination.

Legal professional privilege is recognised as a fundamental protection in legal proceedings. This is divided into two main categories: legal advice privilege and litigation privilege. Legal advice privilege applies to confidential communications between a lawyer and client for the purpose of giving or receiving legal advice, regardless of whether litigation is contemplated. Litigation privilege, on the other hand, applies to communications between a lawyer or client and third parties, but only where litigation is pending or reasonably anticipated and the communications are made for the dominant purpose of that litigation.

The protection afforded by the application of privilege does not apply in instances of fraud – better known as the iniquity exception. More importantly, privilege will not apply to communications or documents created for the purpose of furthering a fraud, crime or other form of dishonest or improper conduct. This applies equally to both legal advice privilege and litigation privilege. The exception may arise even where the legal adviser is unaware of the fraudulent purpose; what is decisive is the intention of the client (or a third party using the client). Cypriot courts will require a strong prima facie case, which would still be assessed on the balance of probabilities, that the communication was part of or in furtherance of such wrongdoing. Where this threshold is met, the privilege is displaced, and the material becomes disclosable.

Τhe general rule is that damages in civil proceedings are awarded to compensate the claimant for loss suffered, rather than to punish the defendant.

However, in limited and exceptional circumstances, the courts may award punitive (or exemplary) damages. Such damages may be awarded where the defendant has deliberately committed a tort with the intention of obtaining a benefit that they calculated would outweigh any compensation payable to the claimant. They may also be justified where the defendant’s conduct is particularly egregious, oppressive or morally reprehensible, which warrants punishment by a civil court.

Cyprus has specific legal provisions protecting banking secrecy. Banking secrecy is regulated by Section 29(1) of the Banking Law (66(I)/97), which prohibits any member of the administrative and management body, the chief executive, directors, managers, officers and employees of a bank who have access to the records of the bank with regard to the account of any individual customer from giving, divulging, revealing or using for their benefit any information concerning the account of that client. This prohibition applies both during their employment or professional relationship with the bank and after the termination thereof.

Banking secrecy in Cyprus is not absolute and may be limited in fraud cases through certain mechanisms.

Statutory Exceptions

Section 29(2) of the Banking Law provides that banking secrecy does not apply when:

• the information is provided to the police under the provisions of any law, or to any other duly authorised public officer or to the court during the investigation or prosecution of a criminal offence;
• the customer gives written consent;
• legal proceedings exist between the bank and customer;
• a garnishee order has been served; or
• disclosure is necessary for reasons of public interest or protection of the bank’s interests.

Civil Fraud Proceedings – Norwich Pharmacal Orders

Fraud victims pursuing civil claims can apply for Norwich Pharmacal orders to compel disclosure. The court will grant such orders where three conditions are satisfied:

• first, a wrong has been committed or is arguably being committed;
• second, the order is necessary to enable proceedings against the wrongdoer; and
• third, the bank has been involved in facilitating the wrong and can provide information to identify or pursue the wrongdoer.

This mechanism has proven particularly effective in fraud cases, allowing claimants to trace misappropriated funds and identify perpetrators who might otherwise remain hidden behind banking confidentiality.

Public Interest Principle

Cypriot courts have consistently held that the public interest in combating fraud overrides banking confidentiality. When fraudulent conduct is alleged, whether in criminal or civil proceedings, the principle of public interest takes precedence over the confidential relationship between bank and customer.

Courts have made clear that individuals cannot shield themselves from legitimate fraud investigations by invoking banking secrecy. An accused fraudster cannot take refuge in the bank-customer relationship to prevent disclosure that would expose wrongdoing.

Cyprus has not yet established a comprehensive legislative framework specifically for crypto-assets. At present, the primary domestic regulation in this area is the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007, which includes provisions governing Crypto Asset Services Providers. In addition, as an EU member state, Cyprus is directly subject to the Markets in Crypto-Assets (MiCA) Regulation (EU) 2023/1114. While the Markets in Crypto-Assets Regulation (MiCA) introduces a broad classification of crypto-assets, it does not address questions concerning their proprietary status.

There is currently no Cypriot case law expressly confirming whether crypto-assets are treated as property. However, given that Cyprus courts apply English common law and equitable principles pursuant to Section 29 of the Courts of Justice Law 14/1960, it is highly likely that they would follow the approach adopted by English courts, which recognise crypto-assets as property (Tulip v Van der Laan [2023] EWCA Civ 83). On this basis, it should be possible to obtain interim relief such as disclosure orders to obtain information about relevant transactions against a cryptocurrency exchange, provided the usual legal thresholds are met.